SSTL Q1 net loss at Rs 316 cr

Revenue dips 9.4%; mobile subscriber base decreases 8%

Sistema Shyam Teleservices, which operates mobile services under MTS brand, today reported net loss of Rs 316.2 crore for the first quarter ended March 31.

SSTL's net loss was more than twice that at Rs 643.9 crore during the same period last year.

"The net loss reduced mainly due to reversals of estimated provisions and lower interest expenses," SSTL Chief Executive Officer Dmitry Shukov said here.

The revenue of the company decreased by 9.4% at Rs 318.8 crore during the quarter, from Rs 352 crore in Q1, 2012-13.

Compared to the previous quarter, October-December, 2013, the company saw revenue increase of 6.4% from Rs 299.6 crore.

"During the quarter our revenues grew by 6.4%, quarter-on-quarter, largely driven by growth in minutes and in non-voice revenues. We also launched most aggressive data plans in the country to further supplement our 3G PLUS network. We expect strong momentum in data to continue," Shukov said.

SSTL provides high speed wireless Internet services in over 600 towns in 9 circles where it operates.

SSTL said it expects the government to auction 800 Mhz band spectrum, presently used for CDMA mobile services, at reasonable a base price without delay so that the company can expand operations.

The company demanded that the government fix CDMA spectrum reserve price at Rs 1,816 crore a megahertz, which is 2% lower than the base price set for the last auction conducted in March, 2013.

Telecom regulator Trai has recommended Rs 2,685 crore per megahertz, which is around 50% higher than the previous pan-India base price.

SSTL said non-voice revenues contributed 35.3% to its total quarterly revenues which is highest in the industry.

SSTL's Q1 operating loss before depreciation and amortisation reduced to Rs 97.5 crore during three month period ended March 31, from Rs 211.3 crore posted in the corresponding period a year ago.

"Margins improved on account of cost optimisation, strict control over marketing, other expenditures and operational efficiencies. The OIBDA loss for the quarter also includes reversal of estimated provisions for expenses in exit circles on account finalisation of liability," SSTL Chief Financial Officer Sergey Savchenko said.

SSTL's mobile subscriber base in Q1 decreased by 7.9% from the previous quarter, and reached 9.04 million customers as of March 31.

"The subscriber base declined due to cleaning up of inactive subscribers," Shukov said.

SSTL said the usage of its network by mobile subscribers improved to 414 minutes in Q1, from 373 minutes in the previous quarter.

Non-voice revenues, from both data and mobile VAS, for the quarter increased by 9.1% to Rs 112.4 crore, Shukov said.